Kibo Mining PLC (LON:KIBO) has agreed a price to build its Mbeya thermal power station in Tanzania.
A legally binding EPC (engineering, procurement, construction) cover agreement was signed with its Chinese partner and contractor SEPCO III on 19 December.
Kibo’s chief executive Louis Coetzee described it as a true watershed moment in the history of the MCPP.
“Signing the EPC Cover Agreement is the most decisive step forward to date in the development process of the MCPP and
“The EPC price is one of the most, if not the most important, factors that determines the ultimate viability of a project like the MCPP.
“With certainty on the EPC price now we can confidently state that the MCPP is not only definitely viable, but also very robust and that it has exceeded all our expectations to date.”
The full EPC contract will remain subject to the Power Purchase Agreement and final requirements by lenders and equity investors during financial close.
SEPCO III’s bid significantly exceeded price and technical expectations and specifications, Coetzee said.
“The final EPC price will now also allow us to finalize the integrated financial model for the MCPP, but more importantly to finalize PPA negotiations expeditiously, as soon as the Tanzanian Government has concluded its final policy changes on the procurement of power projects like the MCPP. “